Profit off 2.3% for Conway bank

Home BancShares, which has Centennial Bank branches in four states, posted a net income of $71.4 million in the first quarter, a 2.3 percent decrease from $73.1 million in the same period last year, the Conway bank said Thursday.

Earnings per share were 42 cents, unchanged from the first quarter last year. That matched the 42 cents a share projected by 10 analysts surveyed by Thomson Reuters.

Home BancShares closed at $19.12 Thursday, up 17 cents in trading on the Nasdaq exchange.

"Considering all the noise in the market the last two quarters, we are proud to maintain our net interest margin at 4.30 percent and to meet the earnings per share target of 42 cents," said John Allison, chairman. "We think stability and good asset quality are important and outweigh the need for fast growth."

Garland Binns, a Little Rock banking attorney, made note of the stability of Home BancShares' earnings and slight improvement in its book value per share.

Book value per share is the company's stockholders equity divided by the shares outstanding.

"Overall, Home BancShares continues to perform well," Binns said.

At the end of the first quarter, Home BancShares had total loans of $11 billion, total deposits of $11.1 billion and total assets of $15.2 billion.

Matt Olney, a bank analyst in Little Rock with Stephens Inc., said Home BancShares bought back $51.7 million in its stock during the first quarter, more than the $36 million Stephens expected.

Olney rated the bank's stock as a buy, with a target price of $22 a share.

With the company's stock trading at a low level, one analyst asked Allison how he'd compare buying back stock with making an acquisition, or even considering a merger of equals.

Home BancShares has discussed a merger of equals, Allison said. But there are few banks that operate as efficiently as Home BancShares does, Allison said.

Randy Sims, Home BancShares' chief executive officer, said he'd never seen a merger of equals that didn't eventually become an acquisition.

"We're open to any of that but we'll continue buying back stock," Allison said.

In the past five quarters, Home BancShares bought back almost 5 percent of its stock, Allison said.

"We think that's a good use of funds," Allison said.

Centennial Bank has 77 branches in Arkansas, 76 in Florida, five in Alabama and one in New York City. The bank also has lending offices in Los Angeles and Dallas.

The Los Angeles and Dallas offices are part of Centennial's New York office.

The older Los Angeles office produces 15 percent to 20 percent of the New York business, said Chris Poulton, who runs the three offices.

The Dallas office is in its infancy, Poulton said, and has $100 million to $150 million in potential loans in its pipeline.

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Graphs showing Home BancShares first quarter information.

Business on 04/19/2019

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